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DWP Lost Millions in Fraud Case: Greuel

The Los Angeles Department of Water wasted millions of taxpayer dollars due to fraud by employees using the organization's purchasing card program, according to a report released by City Controller Wendy Greuel. (Published Sunday, Nov. 20, 2011)

The Los Angeles Department of Water and Power wasted millions of taxpayer dollars due to fraud by city employees using the organization's purchasing card program, according to a report released by City Controller Wendy Greuel.

Prosecutors said from March 2008 to November 2009, nearly $242,000 worth of furniture was purchased by city workers who then marked the items up and charged the DWP $399,000, according to the Los Angeles Times. The workers then pocketed the difference.

"They we're using it for furniture and other things and using a company that someone else owned. It was really a mess," Greuel said.

Because the cards did not allow a single expenditure to exceed $2,000, the defendants were forced to use nearly a dozen "P-cards" to split the purchase orders into smaller pieces, the Times reported.
Greuel blamed the fraud partly on a lack of proper oversight and said as a result of the investigation, the DWP substantially lowered its use of P-Cards, saving millions of dollars.